India to Remove Anti-Dumping Duty on Graphite Electrode Imports: Sources
Mining News Pro - SteelMint has heard from its market sources that India is set to remove anti-dumping duty (ADD) on imports of graphite electrodes (GE) from China that was imposed in 2015.

As per the latest updates, DGAD (Directorate General of Anti-Dumping and Allied Duties) has sent a disclosure (notice) to the concerned parties mentioning that in the current scenario of a dramatic surge in global graphite electrode prices including that of China, the imposition of anti-dumping duty on GE imports is inconsequential.

On 4 July’ 2018, DGAD has conducted an oral hearing in Mid-Term review (MTR) investigation against imports of graphite electrodes in or exported from China and nearly after a month, DGAD has sent a disclosure to the concerned parties indicating removal of anti-dumping duty on GE imports.

In India DGAD which comes under Ministry of Commerce is responsible for conducting the anti-dumping and anti-subsidy/countervailing investigations and making recommendations to the Central government for the imposition of anti-dumping or countervailing measures meant to protect the domestic industry from unfair trade practices of the trading partners in the form of dumping and subsidization.

Why India imposed ADD on Graphite electrode from China?

According to data with SteelMint, the imports of graphite electrodes in FY’14 (12,800 MT) & FY’15 (13,700 MT), saw an increase in cheaper imports from China which flooded the Indian graphite market.

As a result in order to protect the domestic industry, in 2015 Indian Finance Ministry imposed an anti-dumping duty for five years on imports from China based on the recommendations of the DGAD. The duty ranges between USD 278.19 and USD 922.03 and the duty imposed being variable it varies specifically to various companies from China.

After the imposition of anti-dumping duty, the Indian GE import market became dormant in FY16 (6,800 MT) & FY17 (4,000 MT) resulting in the decline of GE imports from China by 40% which was the largest supplier of graphite electrode to India.

India initiates Mid-term review of ADD on graphite electrode imports

In latter half of 2016, China ordered the closure of about 30,000 tonnes of its polluting GE capacity and also promoted increased usage of electric furnaces for steel production as a part of country’s anti-pollution campaign. This led to a surge in graphite electrode prices in China.

With increased demand for GE, its prices also increased significantly especially in the year 2017, whereas its supplies became limited in the export market. Subsequently, the prices of graphite electrode in the global market also rose drastically with China being one of the largest exporters of graphite electrode in the world.

Amid this supply shortage from China and surged GE prices, in March 2018, Alloy Steel Producers Association of India (ASPA) requested the DGAD for initiation of a mid-term review of the anti-dumping duties imposed on the imports of Graphite Electrode originating in or exported from China.

What is Mid-Term Review?

Mid-term Review is undertaken by the Designated Authority any time during the period of 5 years when the levy Anti-Dumping duty is in force, wherein the duty may be continued, modified or revoked. Such review can be undertaken only if a reasonable period of time has elapsed since the imposition of the definitive anti-dumping duty. Upon such review, the Designated Authority shall recommend to the Central Government for its withdrawal, where it comes to a conclusion that the injury to the domestic industry is not likely to continue or recur if the said anti-dumping duty is removed or varied and is therefore no longer warranted.

Any mid-term review initiated needs to be concluded within a period not exceeding twelve months from the date of initiation of such review.

The likely impact on Indian market after ADD removal

The impact of anti-dumping duty removal on Indian GE market is expected to be limited as the price of graphite electrode in China and India are trending in the same range. Also given the high GE prices in China, the anti-dumping duty has already become quite insignificant.

The price of UHP grade GE of size 600 mm in China is about RMB 90,000-110,000/MT (USD 13,160 – 16,084/MT) whereas the Indian prices for the same are trending at INR 995,000/MT (USD 14,500/MT).

For the upcoming months, although China is likely to add about 80,000 tonnes of electrodes capacity the domestic steel demand is anticipated to remain strong which will help to keep the graphite electrode prices firm in the country. Thus, the chances of increased imports of GE from China in India after the removal of ADD is expected to be limited.

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